bobevenson wrote:Under the AEP tax system, the total amount of taxes does not change, only the way it is assessed, and since everything is taxed, the tax rate goes down, people will pay less tax since there is no income tax or sales tax, successful companies will pay less tax since profits are not taxed, and nonprofit organizations will pick up their fair share of taxes which they do not pay now.
It's not just successful companies that will pay less tax.
Rich people who save more of their money than the poor will save a lot more now, and they will be more likely to buy expensive property abroad rather than in the USA. Which means that the market value of high end housing will collapse. THat's sort of good ebcause now poor folks can afford Beverly Hills mansions. But it means the tax haul from those properties will fall a lot.
Poor people already don't pay much tax.
So the guys in the middle will foot most of the bill. This will happen to them because they own houses, but their houses have to be near their jobs. So they have to sell their house and rent another as quick as possible... but that makes their market value fall, so your tax haul goes down again.
Unsuccessful companies - which under present rules are able to offset losses against future taxes while they restructure their operations- will no longer be able to do that, so they will go bust....
But now their creditors own the factories, warehouses, shops etc. That means that they become liable for your taxes, which the original inhabitants cannot pay. So now those factories and warehouses and shops have to be sold off cheap to unload them, because every day they sit idle they are a liability not an asset...
Which means their market value falls. Which means they result in less tax income than you promised. Which means you have to put the overall rate up.
Your tax will collapse the values of residential, commercial and industrial property.
That in turn means that debts relative to income will soar, and incomes will therefore fall. And you will have made America poor.